Nile Gardiner is a Washington-based foreign affairs analyst and political commentator. A former aide to Margaret Thatcher, Gardiner has served as a foreign policy adviser to two US presidential campaigns. He appears frequently on American and British television, including Fox News Channel, BBC, and Fox Business Network.

Germany’s vision of a European superstate threatens national sovereignty and the transatlantic alliance

German finance minister Wolfgang Schäuble’s interview this week with Der Spiegel should be required reading on both sides of the Atlantic for anyone concerned about the future of the nation state in Europe. It is perhaps the most important set of statements by a German official in recent years addressing the European Project, and is highly revealing of a closed, fixed mind-set among EU elites that is massively out of touch with public opinion across most of the European Union, including within Germany itself.

A new YouGov poll has found that only 43 percent of Germans would vote to keep the Euro. Across the EU, there is overwhelming disillusionment with the single currency, with a recent Pew Survey in eight EU nations showing on average just 34 percent with a positive view of economic integration.

In his interview with Germany’s leading news magazine, Schäuble launched into a fierce defence of the Euro, declaring it "the logical consequence of the advancing economic integration of Europe," making it clear that it was merely a precursor to full political union. In order to make the Euro work, however, Schäuble insisted on the need for a deep fiscal union, with a single finance minister given the power to veto national budgets:

The most important thing is that we create a fiscal union, one in which the nation states give up their jurisdiction in terms of fiscal policy. In addition, the problems of the Spanish financial institutions reveal, once again, that Europe would be better off with a bank union. We need a European supervisory authority, at least over the major lenders, which can then influence the banks directly. Then we can also save them with joint funds.

… In an optimal scenario, there would be a European finance minister, who would have a veto against national budgets and would have to approve levels of new borrowing. It would be up the individual countries to decide how to spend the approved funds, that is, how to answer the question: "Should we spend more money on families or on road construction?"

From Berlin’s perspective, a fiscal union would go hand in hand with a fully fledged central government in Brussels with an "elected" EU president and a European Parliament and Senate with the ability to enact legislation. According to Schäuble,

Those who want a strong Europe also have to be willing to surrender decisions to Brussels… there are still too many national competencies in foreign and security policy. Europe should speak more effectively and clearly with one voice in the world.

… nowadays everyone has a say: the European Commission, the Council of Ministers, which consists of the national representatives, and the European Parliament. This is hard to figure out, even for political buffs. First the Commission has to develop into a real government. To that end, it ought to be elected directly, either by the parliament or through the direct election of a Commission president. I favor the second option…. The direct election would be preceded by a large-scale mobilization, and it would electrify all citizens from Portugal to Finland.

… It would be best to have a body representing the countries that's based on the model of the German Bundesrat or the US Senate, with each country dispatching a certain number of representatives to this body. Of course, all laws would require a majority in the body, as well as in the parliament.

Schäuble’s interview followed proposals unveiled earlier in the week by German Foreign Minister Guido Westerwelle and the newly formed Future of Europe Group, which includes foreign ministers from several EU member states including the Netherlands, Spain and Italy. The proposals are nothing less than a blueprint for a federal superstate, summed up here by the BBC:

• More European power to determine the economic and tax policies of the member states. There should be a "transfer of sovereignty" to the European centre
• A strengthening of the EU's "foreign office", with a common European foreign and security policy
• A smaller European Commission able to make decisions faster
• A bigger role for the European Parliament to make "stronger democratic legitimacy"
• A directly elected President of Europe
• A European army

As the Eurozone begins to crumble, Schäuble’s grand vision may only be a pipe dream. But it is important not to underestimate the willingness of the EU’s political elites to defy popular opinion and common sense by accelerating the relentless drive towards ever-closer union. Each new EU summit will bring ever-increasing calls for greater powers to be given to Brussels at the expense of the nation state. This is no time for complacency.

If the British government needs any further incentive to hold a referendum on the EU, this is it. The German-led proposals, if enacted, would represent the biggest transfer of national sovereignty in the post-war history of Europe, and offer a nightmarish vision of a powerful central government in Brussels wielding extraordinary power over nation states. It is a very real threat to self-determination in Europe, as well as a threat to the transatlantic alliance, particularly NATO.

It is in Britain's, Europe's, and America’s interest to have a Europe of nation states, one that allows the free movement of goods, services, and people, but retains its sense of national identity. The beating heart of the transatlantic partnership are the Anglo-American Special Relationship and the powerful ties between Washington and national capitals across Europe. A Europe that concentrates economic and political power in the hands of a central government, imposes a common foreign and defense policy, and weakens NATO, will undermine prosperity, undercut transatlantic security, and damage democracy.

German Chancellor Angela Merkel has declared that “the lesson of this crisis is more Europe, not less Europe.” She is wrong, and even most Germans don't agree with her. The central lesson of the Eurozone debacle is that big government and Eurofederalism have been a disaster. Europe needs both economic freedom and self-determination, without which it is doomed to failure.